Out in the cold: many millennials cannot afford to buy their own homes, but renting does not come cheap.
Photograph: Christopher Thomond for the Guardian

Having a child while living in rental accommodation has become unaffordable for young families in two-thirds of the UK, the Guardian can reveal.

Birmingham, Edinburgh, Bristol and all of south-east England rank among areas where young couples could be financially hindered from having children because they are paying too big a share of their income to their landlord.

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Using the average regional full-time wage for workers in their 20s and 30s and the cost of privately renting atwo-bed home in the area, the Guardian, in conjunction with Generation Rent, found that young couples would have to spend more than 30% of one full-time earner’s wage to keep a roof over their head in 66% of the country.

There is no official definition of what a family can afford in the UK, but housing charity Shelter says it amounts to 33% of income, while the National Housing Federation says it is 25%. In the US, the Department of Housing says the baseline is 30%; if rent is above this level, families “may have difficulty affording necessities such as food, clothing, transportation and medical care”.

The findings have renewed calls from MPs and housing campaigners for rent caps to be reintroduced after being abandoned more than 20 years ago.

The only areas that remain affordable are in the north-west, north-east and Yorkshire and the Humber. Northern Ireland was also affordable when measured against the average income for all age groups. There are no separate figures for young workers in the region.

The most inaccessible place for those wanting to start a family was London, with a two-bedroom rental there costing 60% of the average income for someone in their 20s and 44% for someone in their 30s. This was followed by the south-east, south-west and the east.

A typical new family will rely on one full-time salary to make ends meet. If the rent is too high, that is unviable.

Betsy Dillner, Generation Rent

“For people on modest incomes, having a child will normally involve one parent staying at home while the other works full time, for a period longer than parental leave normally covers,” Betsy Dillner, director of Generation Rent, said. “That means a typical new family will rely on one full-time salary to make ends meet. If the rent is too high, that makes the arrangement unviable.”

For those on lower incomes, Dilner said: “the situation is even worse, with constant anxiety over how to put food on the table, and nothing left at the end of the month to put aside for the future.

“Not only do young adults face renting for a longer period at a higher cost than their parents, and may never actually buy a home, they are less likely to start a family – a prospect that ought to terrify older generations and policymakers alike.

She added that if local leaders did not want to see their communities decimated by the housing crisis, they needed to start building on the “uglier parts of the green belt” and introduce rent controls.

The call for building on the green belt and rent caps was backed by Labour MP Frank Field, chair of the Commons work and pensions committee, which recently set up an inquiry into intergenerational fairness.

Field said that “one emergency option” to solve the housing crisis “would be to consider capping rents at an affordable rate for young families seeking their first home”.

Further analysis from pollsters Ipsos Mori reveals the extent of the huge generational shift in UK housing tenure in the past 15 years. Millions more millennials – today’s adults born after 1980, also known as Generation Y – are being corralled into private renting than the generation before them.

Looking at decades of data from the British Social Attitudes survey, Ipsos Mori found that that in 1998, when the average member of Generation X (those born between 1965-1979) hit age 27, 55% of them were homeowners and 24% of them were renting from private landlords.

In 2014, when the average millennial was the same age, only 32% were homeowners), while 45% were renting privately.

There has also been a rise in number of millennials living with their parents, and the Ipsos Mori found that this shift was being underscored by educational disadvantage. Millennials living with parents were half as likely to have a degree, a correlation that did not hold true for Generation X, according to its analysis.

While growth in incomes for young adults in the UK has done well over 30 years by international comparisons, the cost of housing – especially in the private rented sector – is putting massive strains on young British couples looking to start a family.

Jamie Beer, 26, was a soldier for seven years and served in Afghanistan. Today he lives with his partner in a one-bedroom flat in Cardiff with “very basic amenities”. The rent takes up 30-40% of their joint income and having children looks like an ambition they will be putting off until their mid-30s, he said.

“We plan to have kids in the next five years [but] the way things are currently … in south Wales, we wouldn’t be able to. We’d be doubling our rent if we wanted anything bigger than we have now.

“The majority of my friends, bar two or three of them, we’re all underneath the average salary.”

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His friends do not talk about the future any more, he said. “We enjoy our lives … but none of us really think about the future too much because it’s depressing.” His graduate girlfriend works in social media with a stable job, “but her salary doesn’t reflect her education”, he said.

“Between me and my partner, we’re still young but when you look at our parents and grandparents, it seems that we have to wait longer in life to do things they did relatively young. Some people might think ‘there’s no harm in waiting’. But you don’t want to wait all your life to start a family.

“We’re living day to day. We can’t plan for kids in the future, we’re just worried about the rent.”

In the Guardian’s study, Wales ranked as one of the more affordable places to start a family while renting. In 2015, the average annual rent for a two-bedroom home took 31% of one full-time worker’s wage in their 20s, above the level of affordability. For someone in their 30s, it was 23%.

Leanne Crook, a 30-year-old tutor who lives in Oldham, said she was lucky because her rent has stayed the same for six years: “It is quite good. We live about 15 minutes outside of Manchester city centre. It’s a lot cheaper.”

That has allowed her and her partner, a management accountant, to be diligent savers. “We’re both quite sensible with finances … I feel we’re comfortably saving for a mortgage as well as renting. [But] In the past couple of months, I thought if we have a child, we wouldn’t be able to do all three,” said Crook.

“It’s not something that’s stopping us from having children but if it did happen it would make things more difficult for us.”

Leanne Crook at home in Oldham. Photograph: Christopher Thomond for the Guardian

According to the Guardian’s analysis, the north-west remains one of only three regions in England where it is affordable to start a family as a tenant.

Field said: “The only sustainable way to improve those families’ chances of gaining suitable accommodation, and prevent their children growing up in an overcrowded home, is to increase the supply of houses that are genuinely affordable.

“This programme will necessarily need to encroach on to some of the grubbier parts of the green belt and, for it to be effective, will have to be accompanied by a renewed effort to control our borders. Failure to act on any of these fronts could cast a whole generation adrift from the housing market.”

Responding to the findings, the the National Landlords Association’s chief executive, Richard Lambert, said: “The cost of housing is high for everyone at the moment, whether you rent or have a mortgage, so frustration about affordability is understandable. However, rents alone are not to blame. They have risen broadly in line with inflation over the past decade.

“Affordability is being eroded largely because the demand for housing greatly outstrips supply, and because salaries aren’t rising in line with inflation.”

He added that the long-term solution lay in building more homes, particularly in the social sector. “Instead the government is preoccupied with championing home ownership, leaving those genuinely in need of affordable rented housing left clinging to tired political rhetoric like rent controls,” he said.

A Department for Communities and Local Government spokesman said: “We’re determined to create a bigger, better private rented sector - attracting billions of pounds of investment to build homes specifically for private rent - increasing choice for tenants.

“We’ve also doubled the housing budget to support the boldest housing programme by any government since the 1970s, with £8bn committed to build 400,000 affordable homes over this parliament.

“We are doing all of this without the need for excessive state regulation that would destroy investment in new housing, push up prices and make it harder for people to find a flat or house to rent.”